1. Field of the Invention
The present invention generally relates to point-of-sale discounting systems and, more particularly, relates to a point-of-sale discounting system in which a discount is applied to a transaction in response to a consumer electronically providing a promotional code to the system used by the retailer to record the transaction.
2. Description of Related Art
Retailers have long relied upon the discounting of goods as a method to attract consumers to their establishment. For example, a retailer may reduce the price of selected goods and, using the local media, encourage consumers to visit their store by advertising the selected price reductions. Oftentimes these discounts, generally referred to as "specials", are quite substantial and cause the retailer to lose money on each sale of the discounted goods. The retailer recoups this loss from profits on other, non-discounted goods purchased by the consumer during their visit.
While widely utilized, advertised specials are disliked by many retailers because of its inability to discriminate between the price-conscious and casual consumers. Specifically, the advertised price reduction will motivate the price-conscious consumer into visiting the store with the intent of purchasing the discounted items. Thus, the loss taken on the sale of the discounted items are necessary in order to receive the profit on the sale of other goods to the price-conscious consumer. The casual consumer, on the other hand, visits the store to purchase goods without intending to purchase the discounted item. Upon discovering the discounted items on the shelves of the store, the casual consumer will often decide to purchase these items. Furthermore, discounted items are sometimes purchased by casual consumers who are entirely unaware of the discount. As a result, therefore, the retailer must absorb the loss on sales of the discounted items to consumers who visit the store with or without knowledge of the discount.
Coupons are often used to restrict discounts to price-conscious consumers. More specifically, in order to receive the discount on a selected item, the consumer must provide the retailer with a coupon clipped from an advertisement run in the print media. In this manner, the retailer limits the discount to those consumers sufficiently price-conscious to "clip" coupons. There are, however, a number of drawbacks to the use of coupons. First, coupons are generally limited to the print media. Thus, if the retailer relies solely on coupons to motivate price-conscious consumers to visit the store, those consumers who only use radio or television for news and information will not be reached by print advertisements. The use of coupons also lengthen the time required to complete a transaction. Specifically, after subtotaling the consumer's purchases, the cashier must then enter a discount for each coupon proffered by the consumer. To prevent the consumer from fraudulently obtaining discounts, the cashier must check to see if the coupon has expired and whether the consumer has actually purchased the item for which the discount is sought.
Various ways of speeding the discounted transaction, primarily by eliminating the paper coupon, have been proposed. For example, U.S. Pat. No. 5,185,695 to Pruchnicki proposes that paper coupons be eliminated in favor of an automated system in which a coupon list which includes product type, validation period and discount amount is maintained in memory. When products on the coupon list are purchased, the discount is automatically deducted from the purchase price. While successfully eliminating many of the delays associated with the use of paper coupons, the solution proposed by Pruchnicki would be disfavored by many retailers in that the discount is awarded to casual consumers who purchase the goods when visiting the store without prior knowledge of the discount.
It has also been proposed that retailers maintain an electronic display of coupons valid for use in their store. A consumer may select coupons from the display and, if the corresponding items are purchased, the consumer is credited in accordance with the terms of the coupons. In Re. 34,915 to Nichtberger et al., the consumer presents a card which enables the cashier to retrieve the consumer's coupon selections from a central unit. In U.S. Pat. No. 5,420,606 to Begum et al., the coupon selections are maintained in a customer display device which is presented to the cashier at the checkout counter. While Nichtberger et al. and Begum et al. require some price consciousness in that the consumer must devote time into selecting coupons for use from an electronic display, they do not overcome the aforenoted deficiency of Pruchnicki in that the discounts are not used to attract the consumer to the store. Instead, the discounts are made available to all consumers who visit the store and select the coupons.
Several electronic coupon storage and redemption systems which are clearly directed to the price-conscious consumer have been disclosed in the art. U.S. Pat. No. 5,192,854 to Counts is directed to a system which enables consumers to electronically store and redeem coupons. Data stored in the coupon scanner is compared to the products being purchased and, if matching, the consumer is credited with the value of the coupon and the coupon data is removed from the scanner. U.S. Pat. No. 5,380,991 to Valencia et al. discloses the use of a so-called "smart" card capable of electronically carrying a number of paperless electronic coupons. After the consumer's purchases are scanned and totaled, the card is inserted into a master reader/writer which retrieves potential discounting information from the card. Neither of these systems, however, directly motivate a consumer to, in response to a specific advertised promotion, visit a particular store to take advantage of the promotion. Counts merely enables a consumer to electronically collect coupons of all types while Valencia et al. is designed to encourage repeat patronage of a store and/or product.
It may be readily seen from the foregoing that it would be desirable to provide a point-of-sale discounting system in which the consumer uses publicly distributed promotional codes while the sales transaction is on-going to automatically receive discounts on purchased goods. It is, therefore, the object of the invention to provide such a point-of-sale discounting system.